Doing Business in Texas in 2026: Courts, Capital, and Capacity

Texas has established itself as a leading business-friendly jurisdiction in the United States. According to the Texas Economic Development & Tourism Office, Texas continues to attract businesses due to its business-friendly climate, absence of corporate or personal income tax, skilled and diverse workforce, accessible global markets, strong infrastructure, and reasonable regulatory environment. However, in 2026, Texas is moving beyond size, growth, and political branding by building a comprehensive business-law ecosystem. This includes specialised courts for high-value commercial disputes, updates to corporate-governance law, new capital markets infrastructure, advanced power and infrastructure planning, and support for emerging industries such as commercial space, artificial intelligence infrastructure, energy expansion, and advanced manufacturing. For companies considering Texas, the opportunities are significant, but so are the diligence requirements. Growth alone no longer defines Texas; legal, governance, energy, and dispute resolution planning must now be addressed early in any Texas investment.

A new forum for high-risk business disputes

One of the most important legal developments for companies doing business in Texas is the creation and continuing refinement of the Texas Business Court and the Fifteenth Court of Appeals. Together, they represent a structural change in how Texas will handle many high-stakes commercial disputes. The Business Court is a specialised trial court for certain commercial disputes. It does not replace Texas district courts, nor does it hear every business case. Its importance lies in the types of disputes it is designed to handle: high-value commercial matters, governance disputes, fiduciary-duty claims, significant business transactions, and other matters that can benefit from judges focused on complex business litigation. For parties entering Texas transactions, this development changes initial planning. Forum selection clauses, venue provisions, governing-law clauses, jury-waiver provisions, arbitration clauses, and entity-governance documents should be reviewed with the Business Court in mind. Companies should not assume disputes will automatically be heard in the Business Court, nor should they overlook its likely influence. In appropriate cases, access to a specialised business forum may influence litigation strategy and settlement leverage. The Fifteenth Court of Appeals is equally important. Appeals from the Business Court follow a specialised appellate path. Over time, that should help create a more coherent body of Texas commercial-law precedent. That is significant in a state where large commercial disputes historically moved through different intermediate appellate districts, creating the possibility of uneven treatment among regions. As with any new court, some initial uncertainty is expected. Parties are testing the limits of jurisdiction, removal, remand, venue, and amount-in-controversy requirements. This uncertainty should prompt careful drafting, pleading, and planning, rather than avoidance of the forum. For businesses, dispute-resolution strategy in Texas now starts before litigation. It should be considered during contract drafting, entity formation, governance updates, and when determining where and how prospective disputes will be resolved.

Corporate-governance modernisation and the Texas redomestication pitch

The Business Court is just one aspect of Texas’s expanded strategy. The state has also enacted substantial changes to its business-organisation laws, striving to make Texas more attractive for operating, forming, governing, and potentially redomesticating business entities. Recent amendments to the Texas Business Organizations Code address issues that matter to directors, officers, shareholders, investors, and litigation counsel. They include provisions concerning internal entity claims, exclusive Texas forum provisions, jury-waiver provisions in governing documents, derivative proceedings, director independence, officer and director liability, and the treatment of certain shareholder-litigation practices. These changes reveal a national competition for corporate charters, headquarters, and investment. While Delaware remains the leading corporate law jurisdiction, Texas is making a direct appeal to corporations and investors. For companies with significant operations, capital, or litigation in Texas, and growing access to Texas-based exchange infrastructure, Texas corporate law should be part of strategic planning. The most immediate impact is on corporate planning. Boards and management teams of Texas entities should review their governing documents to ensure compliance with the new statutory environment, including exclusive-forum provisions, jury waivers, indemnification and exculpation clauses, derivative-action procedures, shareholder-meeting mechanics, and approval thresholds for significant transactions. Public companies have additional considerations. Texas now allows certain nationally listed corporations to opt into stricter requirements for shareholder proposals. These provisions may appeal to companies concerned about shareholder activism, environmental or social proposals, or proxy-season costs, but call for careful analysis. Investor expectations, exchange rules, federal securities law, proxy-advisory firm positions, and shareholder-relations strategy remain important. Not every company should become a Texas entity, but the question is now more relevant than ever. Texas is moving beyond branding and is building a legal infrastructure to compete for corporate decision-making authority.

Y’all Street and the rise of Texas capital markets

The term “Y’all Street” reflects a genuine trend, despite being more of a slogan than a legal doctrine. Dallas, along with the broader Texas market, is increasingly positioned as a financial centre, supported by new exchange infrastructure and a growing capital markets presence. The Texas Stock Exchange is part of the state’s effort to provide a Texas-based alternative in public markets. NYSE Texas has launched as a Dallas-based electronic equities exchange, and Nasdaq Texas now offers dual-listing functionality. These developments give Texas a more prominent role in public-company listing, trading, issuer relations, and corporate identity. A Texas listing option may affect investor communications, corporate governance choices, exchange compliance planning, shareholder proposal strategy, and the wider decision about whether to align a company’s legal identity, operational headquarters, and public-market presence. These exchange developments complement the state’s corporate-law reforms. Texas is pursuing an integrated approach including corporate law reforms, specialised courts, an appellate structure, exchange infrastructure, and a business climate designed for public companies, private equity sponsors, family offices, lenders, and emerging-growth businesses.

Texas is unlikely to replace New York as the centre of US capital markets or displace Delaware’s dominance in public-company governance. However, companies now have more options, which should be evaluated strategically rather than by default. For companies with a significant Texas presence, new questions have become more prominent: should the company remain incorporated elsewhere or consider forming or redomesticating in Texas? Should it pursue a Texas-based or dual listing? Should the governing documents be updated to comply with Texas law? Should commercial contracts account for the Business Court? Should investor-relations teams be prepared to explain the benefits of a Texas-based governance structure? These questions go beyond legal considerations and intersect with finance, investor perspective, and business identity.

Power, data centres, and the new infrastructure diligence

Texas’s growth increasingly depends on the electric grid. While site-selection analysis has traditionally focused on land, labour, incentives, logistics, and taxes, many projects – especially data centres, advanced manufacturing, cryptocurrency facilities, hydrogen projects, and oil-and-gas electrification – now prioritise whether reliable power can be secured on a commercially viable timeline. ERCOT’s long-term planning illustrates the scale of the challenge. Texas sees significant projected load growth, largely from data centres and other major electricity users. Even if not all proposed projects are built, large-load interconnection has become an important factor for economic development. The state has responded with a more organised process for evaluating large-load interconnection requests. ERCOT’s Batch Zero process groups qualifying projects for collective study, permitting more coherent evaluation of demand, reliability, and transmission needs. This approach distinguishes mature projects from speculative ones and provides developers, utilities, and regulators with a clearer planning path. For companies, this shift affects deal diligence. Agreements for large Texas projects should not treat power as a routine utility condition. Power availability, interconnection status, transmission constraints, curtailment risk, private generation, behind-the-meter arrangements, water use, environmental permitting, and cost allocation may all be material considerations. Lenders and investors face similar concerns. Even with a strong site, sponsor, and incentives, a project may face considerable execution risk if power procurement is uncertain. Financing parties should assess the interconnection pathway, utility discussions, load forecast maturity, backup generation availability, and contractual allocation of delay or curtailment risk. Texas will likely remain attractive for data centres and other high-growth infrastructure projects due to its land, large power market, major technology customers, favourable business climate, and energy development tradition.

However, these advantages do not remove constraints, making disciplined diligence essential. Legal work on Texas infrastructure projects is becoming more integrated. Real estate, energy, environmental, tax, construction, finance, procurement, corporate, and litigation counsel must all understand the same project assumptions. The key issue is not only whether the project can be built, but whether it can be powered, connected, operated, and financed in line with the business plan. SpaceX’s Starbase operations in South Texas provide a case study in how Texas approaches frontier industries. While most companies do not resemble SpaceX, Starbase demonstrates both the speed and complexity of disruptive projects in Texas. Commercial space activity involves multiple layers of law and regulation, including federal launch licensing, environmental review, public safety, land use, road and beach access, local government authority, infrastructure development, workforce housing, and community relations. Starbase also illustrates how private industrial projects can influence local governance and regional identity. The FAA’s approvals for expanded Starship/Super Heavy launch activity demonstrate the importance of federal review, even in a state known for business-friendly policy. Texas may provide the local and political environment for rapid development, but a launch operator still depends on federal licensing, environmental analysis, and operational approvals.

For businesses in other sectors, the lesson is broader: Texas welcomes ambitious projects, but legal complexity persists. Advanced manufacturing, semiconductor, energy, carbon-capture, data centre, logistics, and aerospace projects all present multi-layered legal obstacles. Larger and more visible projects are more likely to attract scrutiny from regulators, communities, counterparties, competitors, and advocacy groups. Starbase also stresses the importance of local planning. Texas is not a uniform market; projects in different regions may face distinct political, labour, infrastructure, environmental, and community dynamics. While state-level policy is important, local execution often determines project success.

Privacy, data, and technology compliance as a cross-cutting issue

Texas is emerging as an important regulator of privacy and technology. The Texas Data Privacy and Security Act applies to many companies doing business in Texas, providing products or services to Texas residents, or processing personal data. It grants consumers rights over their data and imposes obligations on businesses regarding notices, consumer requests, data security, sensitive data, and data protection assessments. This extends past traditional consumer-facing businesses. Data centres, software providers, financial services, healthcare-adjacent businesses, retailers, employers, marketing platforms, artificial intelligence developers, and technology vendors must assess whether and how Texas privacy law applies to their operations. Privacy compliance should be integrated into Texas expansion planning. Companies entering the Texas market should review consumer notices, vendor contracts, data-processing agreements, cybersecurity practices, biometric data practices, targeted advertising, sensitive data processing, and consumer-request workflows.

Recent enforcement actions by the Texas Attorney General have focused on failure to provide clear consumer notices, insufficient processes for responding to consumer requests, and inadequate safeguards for sensitive personal data, including biometric and health-related information. Common compliance pitfalls include failing to respond promptly to data subject requests, inadequate employee training in handling personal data, and insufficient documentation regarding data processing activities. Counsel should remain aware of evolving enforcement priorities and ensure that privacy programmes are regularly reviewed and tested to reduce enforcement risk. The key takeaway is that Texas’s pro-business reputation does not equate to a lack of regulation. In privacy, energy reliability, infrastructure, securities markets, and corporate governance, Texas is actively legislating and regulating. While its approach may differ from California, New York, or the federal government, it acts proactively.

Practical takeaways for companies entering or expanding in Texas

Companies operating in Texas in 2026 should view the state as a strategic legal market, not just an operating location. Several considerations are increasingly important.

• First, companies should review governance documents. Texas entities and companies considering Texas formation or redomestication should evaluate forum-selection clauses, jury waiver provisions, derivative-action procedures, director and officer protections, shareholder proposal mechanics, indemnity provisions, and approval requirements for significant transactions.
• Second, companies should draft commercial contracts with a dispute forum in mind. The Texas Business Court and Fifteenth Court of Appeals should be part of the litigation-planning conversation for high-value commercial relationships, especially where governance, fiduciary duty, investment, acquisition, finance, or major commercial disputes may arise.
• Third, capital markets decisions should be integrated with corporate-governance decisions. Texas-based exchanges and dual-listing options may create opportunities, but they also require careful consideration of investor expectations, securities law compliance, public company governance, and communications strategy.
• Fourth, power and infrastructure diligence should move to the front of the project schedule. For data centres, manufacturing facilities, energy-intensive operations, and major real estate developments, power availability and interconnection risk may be as important as land, labour, and incentives.
• Fifth, privacy and technology compliance should be addressed early. Texas privacy law can apply to companies outside Texas that do business with Texas residents. Consumer data practices, vendor contracts, and data protection assessments should be reviewed before launch, not after a complaint or regulatory inquiry.
• Sixth, local execution matters. Texas affords notable opportunities, but projects often succeed or fail based on local infrastructure, permitting, community participation, workforce availability, environmental constraints, and political relationships.

Conclusion

Texas remains an important business jurisdiction in the United States. However, in 2026, its story extends beyond population growth, relocations, and advantageous tax policy. The state is developing a more comprehensive business-law platform. The Texas Business Court and Fifteenth Court of Appeals are changing the dispute-resolution landscape. Corporate-law reforms are strengthening the state’s pitch to boards, investors, and public companies. Texas-based exchange infrastructure is giving substance to the “Y’all Street” narrative. ERCOT’s large-load planning reflects the reality that economic growth now depends on power capacity and transmission planning. Starbase shows how Texas can attract frontier industries while still calling for careful navigation of federal, state, and local law. Privacy regulations show that the state is willing to actively regulate in areas it considers important. For companies, the opportunities are considerable. However, success in Texas now requires more than simply establishing operations. The optimal approach is to align legal structure, governance, dispute planning, capital strategy, infrastructure diligence, and regulatory compliance from the outset. Texas is open for business. In 2026, success also depends on appreciating the legal infrastructure the state is building to support business activity.